Umno fuelling racial, religious discord to hide economic pain

Quiet Ramadan bazaars

Malaysia Chronicle

Pakatan Rakyat leaders have accused the Umno-led federal government of fuelling the latest attacks against their coalition and Penang Chief Minister Lim Guan Eng to divert attention from the economic pain that is starting to be felt by the people, particularly the Muslims, during what should traditionally be an active Hari Raya season.

“The hypermarkets on both Penang island and the mainland have said sales are down and the Malays are not buying yet although there is only a few weeks to Hari Raya,” Pantai Jerejak assemblyman Sim Tze Tsin told Malaysia Chronicle.

Indeed, Prime Minister Najib Razak himself has admitted as much that the country’s coffers are stretched and his administration would not be able to pump prime the economy as it previously did during times of business slowdown.

“We must avoid frequently introducing stimulus packages, because every time we introduce a stimulus package it increases the deficit and it cannot be done on a sustained basis. Fiscal stimulus is a last resort. It is not to be considered as something expedient,” Najib told a press conference last week.

Unable to rise above double standards

At 7.4 percent of Malaysia’s gross domestic product, the fiscal deficit is at a record high and crimps the federal government’s ability to raise debt without having to pay exorbitant interest rates. At the same time, real economic growth is also slowing in tandem to global markets hit by the financial crisis overtaking Greece and Dubai.

Malaysian GDP growth slowed to 8.9 percent in the April-to-June period after hitting 10.1 percent in the January-to-March period. Najib has already warned of a slower second half although the official forecast is for full-year growth to remain above 6 percent still.

Against a fast-darkening sky, it unsurprising that Najib's Umno party has launched a relentless attack to shore up its Malay and Islamic credentials. Not only did it single out Guan Eng, whom it accused of ordering the state religious authority to replace the King’s name with his own during Friday sermons at mosques, it has also attacked its own BN non-Malay components MCA and Gerakan.

“It looks like even the teachers in Johor and Kedah may be let off the hook because Umno is afraid to antagonize the Malay teaching community and erode its voter base. So winning at all costs is Umno’s game, not truth or justice. When a party sets this sort of example, how can it lead the nation anymore?” PAS vice president Salahuddin Ayub told Malaysia Chronicle.

Wild accusations from movie scripts

The coordinated attacks unleashed by Umno, ably assisted by its media such as Utusan and NGOs Perkasa, are still ongoing. Perkasa has just a day ago demanded that MCA president Chua Soi Lek be sacked for questioning the 30 percent Bumiputera equity target and Gerakan president Koh Tsu Koon for siding with Chua.

Another Umno-linked NGO, the Malay Consultative Council, has also accused the Pakatan of harboring dreams to turn Malaysia into a republic when it takes power.

“It is getting from bad to worse. The charades are really becoming like movie scripts these days, the accusations are so wild. It is obviously a political ploy to garner voter sympathy and to hide the real problems going on in the country,” PKR Youth chief Shamsul Iskandar Akin told Malaysia Chronicle.

“But when it comes to the economy, people need to eat and drink, buy clothes, travel. Just buying food alone has become a challenge for the low income. When they see how expensive the goods have become, their dissatisfaction is very real and it becomes more poignant when the pinch if felt during festive months.”

Malaysia’s total external debt rose slightly in the second quarter to RM221.7 billion, or 30.5 per cent of gross national income from RM219.3 billion in the previous quarter. The fiscal deficit widened to 7.4 per cent of GDP in 2009 after the Najib administration pumped in RM67 billion worth of stimulus to help the economy weather the global economic slowdown last year.

Najib, who is also finance minister, aims to bring the deficit down to 5.3 per cent this year, and reduce government debt as a proportion of GDP to 49.9 per cent in 2015 compared to 52.9 per cent this year after some analysts warned that Malaysia could experience a fiscal and debt crisis similar to Greece. There were also complaints from businessmen that the RM67 billion stimulus package - Malaysia's largest ever - did not trickle down into the broader economy.